D.R. Horton, Inc. (NYSE: DHI), known as America’s Builder, reported its second-quarter earnings for fiscal 2025, highlighting a significant decline in key financial metrics. The company, which has operated as the largest homebuilder by volume in the U.S. since 2002, closed 19,276 homes during the quarter, down 15% from 22,548 homes closed in the same period of fiscal 2024. Quarterly revenue also decreased by 15%, totaling $7.7 billion compared to $9.1 billion a year prior.

Net income for the quarter was $810.4 million, or $2.58 per diluted share, a decrease of 31% from $1.2 billion, or $3.52 per diluted share, in the same quarter of fiscal 2024. The consolidated pre-tax income fell 30% to $1.1 billion, with a pre-tax profit margin of 13.8%, a decline from 16% in the year-ago quarter.

D.R. Horton’s net sales orders decreased 15% year-over-year, totaling 22,437 homes with an order value of $8.4 billion, down from 26,456 homes and $10.1 billion in the prior year. The average closing price for homes in the second quarter was $372,500, which reflects a 1% decrease from both sequentially and year-over-year.

The home sales gross margin for the quarter was 21.8%, which is down 90 basis points from the previous quarter. Higher sales incentives implemented to stimulate traffic and drive sales were noted as a significant factor affecting this margin. D.R. Horton’s cancellation rate was recorded at 16%, showing slight improvement from 18% sequentially but up from 15% in the same quarter last year.

Operating expenses also saw notable changes; the homebuilding SG&A expenses increased by 4%, with SG&A as a percentage of revenues rising 170 basis points to 8.9%.

D.R. Horton reported $2.5 billion in cash and $3.3 billion in available capacity from credit facilities at the end of the quarter, resulting in total liquidity of $5.8 billion. Debt stood at $6.5 billion, with a consolidated leverage ratio of 21.1%.

The company actively returned capital to shareholders, repurchasing 9.7 million shares for $1.3 billion during the quarter and paying cash dividends of $125.5 million. Following this quarter, the Board approved a new share repurchase authorization totaling $5 billion.

Looking ahead, D.R. Horton adjusted its fiscal guidance, projecting consolidated revenues between $33.3 billion to $34.8 billion and 85,000 to 87,000 homes closed for the full year. The company envisions home sales gross margin for the upcoming third quarter in the range of 21% to 21.5%.

For the upcoming quarter, D.R. Horton expects consolidated revenues to be in the range of $8.4 billion to $8.9 billion, with homes closed by homebuilding operations estimated between 22,000 to 22,500. Adjustments in operational strategies continue to reflect changes in market conditions, particularly in response to fluctuating buyer demand influenced by economic factors.